What is unreasonable dismissal in Hong Kong

What Is Unreasonable Dismissal in Hong Kong

Unreasonable dismissal is a termination without a valid reason or without fair procedures, as defined by the Employment Ordinance (Cap. 57). The Ordinance protects employees on a continuous contract. This means working for the same employer for at least four weeks and at least 18 hours each week, the 4-18 rule. A termination without a valid reason or proper procedures may be unreasonable, entitling the employee to remedies.

Hong Kong Unfair Dismissal

"Unfair dismissal" is often used interchangeably with unreasonable dismissal, though the Ordinance itself uses "unreasonable dismissal." The law sets out specific circumstances for an unreasonable dismissal. These include termination without a valid reason, such as redundancy without consultation, or dismissal on discriminatory grounds. The Labour Department defines a valid reason as one the employer can prove is genuine and fair, such as poor performance, misconduct, or genuine redundancy.

Claiming Unreasonable Dismissal Hong Kong

An employee must first try internal grievance procedures or Labour Department mediation. If that fails, they may file a claim with the Labour Tribunal. The claim must be made within three months of the dismissal. The employee must prove the continuous contract and the termination, and also the absence of a valid reason or fair procedure. The employer must then prove the dismissal was reasonable and that procedures were followed correctly.

Labour Tribunal Unreasonable Dismissal

The Labour Tribunal hears unreasonable dismissal claims. Its simplified procedure is designed for employees without legal representation. The Tribunal examines the termination reason, the notice period, and procedural fairness. If it finds the dismissal unreasonable, it may order reinstatement, re-engagement, or compensation. The decision is final and binding, with limited appeals possible only on points of law.

Employment Ordinance Unreasonable Dismissal

The Employment Ordinance (Cap. 57) provides the legal framework. Section 662 defines unreasonable dismissal. This includes termination without a valid reason, failure to give proper notice or payment in lieu, and dismissal that breaches anti-discrimination provisions. The Ordinance also provides remedies: reinstatement, re-engagement, or compensation. Compensation is calculated based on length of service, age, and other factors, and may include severance or long service payments where applicable.

Remedies for Unreasonable Dismissal

If the Labour Tribunal finds a dismissal unreasonable, it can order several remedies. Reinstatement requires the employer to re-employ the employee in the same position. Re-engagement requires an offer of a different, suitable position. If neither is appropriate, the Tribunal may award compensation. This is calculated on the employee's loss, including wages and benefits, and is capped at a maximum amount set by the Ordinance. The Tribunal may also order a further sum as a penalty.

Procedural and Substantive Fairness

A reasonable dismissal requires both substantive and procedural fairness. Substantive fairness means the employer had a valid reason, poor performance, misconduct, or redundancy. Procedural fairness means the employer followed correct procedures: giving the employee a chance to respond, issuing a warning where appropriate, and honouring the contractual notice period. Failing on either count can make a dismissal unreasonable. The Labour Department offers guidance on best practices for termination.

Distinction From Other Termination Types

Unreasonable dismissal differs from summary dismissal. Summary dismissal is termination without notice due to serious misconduct. It is not unreasonable if the employer proves the misconduct. It also differs from constructive dismissal, where an employee resigns because the employer breached the contract. An employee may claim unreasonable dismissal in a constructive dismissal case if the employer's conduct made the workplace intolerable. The Labour Tribunal assesses each case's specific facts to determine if the dismissal was unreasonable.